Scriptiegegevens

Blockholders can improve acquirer’s performance via direct intervention, monitoring and trading of shares, but can also worsen performance via self-interested behavior. The focus of this study to examine the difference in relationship between ownership concentration and the performance of the acquiring company around the M&A announcement for the United States and Europe. A sample of M&A transactions by acquiring companies listed in the United States and Europe over the sample period January 1, 2009 to December 31, 2015 is used. Different threshold levels of ownership concentration (5, 10, 20 percent) are taken into account because the percentage of shares owned by a blockholder might affect the benefits and costs of a blockholder. This study underlines the importance of distinguishing different levels of ownership concentration by showing a significant negative relationship only between the number of blockholders at the 10 percent level and the cumulative abnormal return. Moreover, this study illustrates the importance of distinguishing between the United States and Europe by showing a significant difference in the relationship for the United States and Europe at the 10 percent level. The result can be explained by focusing on the benefits and costs of blockholders in combination with the legal system enforced.